At 1364-1370 Queen Street East and 2-6 Greenwood Avenue, we recently extended the Lease with Chino Locos Burritos for an additional 5 year term at a lease rate of $62.67 per square foot net for years 1-3 and $66.02 per square foot net for years 4 and 5.
The new term begins in March of 2022 and expires in February of 2027. This lease rate is one of the highest lease rates of any retail tenancy on or off Queen Street east of the financial core. Chino Locos has been a good tenant for us and we believe they will continue to succeed having increased their take-out and delivery base during the Pandemic. This business is an extremely efficient use of such a small space (only 359 square feet) and even more remarkable since it fronts onto the Greenwood Avenue side of the building (as opposed to the Queen Street side).
In May of 2021, we paid them to close for two weeks so that we could renovate some of the base building components in their space to bring the space up to current fire and building code requirements. As part of our preparations to convert the second storey of this building into a 4-suite hotel, our fire and building code consultants raised concerns about the lack of proper fire separation materials on the ceiling and around the industrial hood vent. The electrical panel, wiring and HVAC also needed to be brought up to date. In addition to reducing danger to guests staying above this space, this was something that could have been raised by a fire marshall or insurance inspector on a routine inspection. We felt the timing was right to address these issues as part of our hotel build-out in order to avoid having problems and potentially having to shut down the retail space and/or the hotel business to address these issues at some point in the future (and probably not on our own terms or choice of timing). The tenant was ultimately very pleased with the new space and more comfortable as a result of the upgraded HVAC equipment. We've since heard that many of their customers have commented on how much cleaner the space looks since the revamp.
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